Correlation Between Goldman Sachs and Guerrilla

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Guerrilla at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Goldman Sachs and Guerrilla into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldman Sachs Group and Guerrilla RF, you can compare the effects of market volatilities on Goldman Sachs and Guerrilla and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Goldman Sachs with a short position of Guerrilla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Guerrilla.

Diversification Opportunities for Goldman Sachs and Guerrilla

-0.81

Correlation Coefficient

Goldman Sachs  Guerrilla

Pay attention - limited upside

The 3 months correlation between Goldman and Guerrilla is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Guerrilla RF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerrilla RF and Goldman Sachs is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Goldman Sachs Group are associated (or correlated) with Guerrilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerrilla RF has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Guerrilla go up and down completely randomly.

Pair Corralation between Goldman Sachs and Guerrilla

Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.18 times more return on investment than Guerrilla. However, Goldman Sachs Group is 5.49 times less risky than Guerrilla. It trades about 0.08 of its potential returns per unit of risk. Guerrilla RF is currently generating about 0.0 per unit of risk. If you would invest  34,609  in Goldman Sachs Group on October 23, 2024 and sell it today you would earn a total of  27,726  from holding Goldman Sachs Group or generate 80.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Goldman Sachs Group  vs.  Guerrilla RF

Goldman Sachs Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Goldman Sachs unveiled solid returns over the last few months and may actually be approaching a breakup point.

Guerrilla RF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerrilla RF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Guerrilla is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Goldman Sachs and Guerrilla

The main advantage of trading using opposite Goldman Sachs and Guerrilla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Guerrilla can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guerrilla will offset losses from the drop in Guerrilla's long position.

The idea behind Goldman Sachs Group and Guerrilla RF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.